Best Utility Stocks to Own Now

Published 03/11/2025, 11:52
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Investing.com -- The utility sector has delivered surprising performance in 2025, with several standout performers showing remarkable growth despite the sector’s traditionally defensive nature. According to the latest WarrenAI Power Rankings, five utility companies have distinguished themselves through a combination of financial health, analyst sentiment, and market performance.

NRG Energy (NYSE:NRG) claims the top position with an impressive 100.4% one-year return, establishing itself as the growth leader in the utility space.

The company earned a solid 2.61 Pro Score from WarrenAI, with analysts projecting a further 6.8% upside from current levels. While its 1.8% dividend yield is modest compared to peers, NRG’s exceptional price appreciation has more than compensated investors. The company’s fair value estimate of $183.47 suggests continued strength, though WarrenAI notes the yield has been shrinking as share prices climb.

NRG Energy issued $4.9 billion in senior notes to help fund its acquisition of Lightning Power, and also declared a quarterly dividend of $0.44 per share. In addition, analysts at Jefferies raised their price target on the company’s stock.

National Fuel Gas (NYSE:NFG) secures the second spot with a 2.63 health score and attractive 3.5% dividend yield. The company has delivered a 36.3% one-year return while maintaining robust dividend coverage at 5.8x.

Analysts see significant upside potential of 21.9% to its $96.21 fair value. NFG’s impressive quarterly EPS growth (381%) reinforces its strong position, though its low liquidity ratio (0.3x) presents a potential concern for investors.

National Fuel Gas reported strong third-quarter results for fiscal 2025, with adjusted operating results increasing by 66% year-over-year, and narrowed its earnings guidance for the quarter.

Consolidated Water (NASDAQ:CWCO) ranks third with the strongest financial health score (2.98) among the group. Nearly debt-free with a minuscule 1.6% debt-to-equity ratio and exceptional liquidity (6.3x current ratio), CWCO has generated a 46.3% one-year return.

Analysts unanimously rate it a "Strong Buy" with a 5.1% upside to its $35.76 fair value. The company’s long-term performance is equally impressive, with a 254% five-year return.

In recent developments, Consolidated Water announced second-quarter 2025 earnings that surpassed market expectations, with an EPS of $0.32 and revenue of $33.6 million.

UGI Corporation (NYSE:UGI) stands out as the dividend leader with a substantial 6.3% yield and 3.7x coverage ratio. Despite negative long-term returns (-38% over five years), UGI has rebounded strongly with a 49.2% one-year gain.

The company earned a respectable 2.76 health score, though its 174% debt-to-equity ratio presents higher leverage than some peers. Analysts rate UGI a "Strong Buy" with 7.7% upside potential.

UGI Corporation has agreed to sell its LPG distribution business in Austria for €55 million as part of its portfolio rationalization strategy. The company also reported third-quarter 2025 earnings that met EPS expectations but fell short on revenue.

Edison International (NYSE:EIX) rounds out the top five as a potential turnaround play. Despite a -27.7% one-year return, EIX offers a 4.4% dividend yield with 3.9x coverage.

Trading at a significant discount to its $66.86 fair value, analysts project 20.7% upside potential as regulatory clarity improves. However, ongoing wildfire liabilities and debt concerns remain challenges to monitor.

Edison International reported robust third-quarter 2025 results, with both earnings per share and revenue significantly surpassing analyst expectations.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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